Mitsubishi Electric to Terminate Mobile Handset Business and Strategically Shift Resources to Strong Businesses

Mitsubishi Electric Corporation (President and CEO: Setsuhiro Shimomura)
announced today that the company has decided to no longer continue its
mobile handset business in Japan in order to strategically shift
resources to the communication-related business and other businesses the
company plans to strengthen. This decision has been made with a view to
further accelerate the company’s growth
strategy under the management policy of “making
strong businesses stronger.”

1. Mitsubishi Electric to Terminate
Mobile Handset Business

Mitsubishi Electric started supplying car phones in 1983 to Nippon
Telegraph and Telephone Public Corp. and since then, the company has
been involved in the mobile handset business in Japan, with the recent
products supplied to NTT DoCoMo, Inc. (hereafter “NTT
DoCoMo.”) It has become difficult these days,
however, to expect growth in demands for the already matured domestic
mobile phone market, with the increasingly diverse preferences of
consumers leading to severe business conditions. Consequently,
Mitsubishi Electric’s mobile handset business
has recently suffered shipment decreases and it has become extremely
difficult to expect improvement in this field.

Under these circumstances, Mitsubishi Electric has considered the course
of action involving the mobile handset business from every aspect and
decided to no longer continue the business. The company will
strategically shift its resources to other businesses the company plans
to strengthen, thus continuously boosting the company’s
business performance and further increasing its corporate value.

Mitsubishi Electric will therefore stop launches of newly developed
models after the current models supplied to and sold by NTT DoCoMo.

Even after the business restructure, however, we will continue
after-sales-service as well as the recall of D06 lithium batteries
(announced in Japan on Dec. 7, 2006).

Meanwhile, Diamondtelecom, Inc., which is a mobile phone sales dealer
and a subsidiary of Mitsubishi Electric, will continue and work to
further expand its business.

Mitsubishi Electric will also work to maintain and further strengthen
the partnership with NTT DoCoMo through the communication related
business we aim to expand.

Summary of Mitsubishi Electric’s Mobile
Handset Business

1) Shipment forecast of approximately 2.1 million handsets in fiscal
2008 (April 1, 2007-March 31, 2008).

2) Sales forecast of approximately 100 billion yen in fiscal 2008.

3) Approximately 600 employees, including R&D, manufacturing and sales
divisions. These employees are basically to be repositioned mainly in
Mitsubishi Electric’s strategic businesses.

2. Mitsubishi Electric to
Strategically Shift Resources to Strong Businesses

Mitsubishi Electric will strategically shift resources of the mobile
handset business to fields that can make best use of its technologies
and know-hows, and is also expected to show further development and
expansion. For example, the company plans to strengthen its businesses
in the following fields: the communication infrastructure business which
involves next generation network (NGN) related equipments and base
transceiver stations for mobile phones, as well as closed circuit
televisions (CCTVs) and other total security businesses, car multi-media
business, factory automation system business, train information
management systems business and others.

With the shift of resources, Mitsubishi Electric will strengthen mainly
the Communication Systems Group and other business Groups that involve
the communication-related business, which is expected to show continuous
development in technologies. The company will also utilize the assets
accumulated through the mobile handset business for our strong
businesses, thus further accelerating the company’s
growth strategy.

3. Forecast for Fiscal 2008 (April
1, 2007-March 31, 2008)

The company’s decision will cause a temporary
loss of approximately 17 billion yen in income before income taxes for
fiscal 2008. Although the forecast for fiscal 2008 may be assessed after
the undergoing review of each business, Mitsubishi Electric expects to
absorb the temporary loss with improvements in various fields.

About Mitsubishi Electric

With over 80 years of experience in providing reliable, high-quality
products to both corporate clients and general consumers all over the
world, Mitsubishi Electric Corporation (TOKYO:6503) is a recognized
world leader in the manufacture, marketing and sales of electrical and
electronic equipment used in information processing and communications,
space development and satellite communications, consumer electronics,
industrial technology, energy, transportation and building equipment.
The company recorded consolidated group sales of 3,855.7 billion yen
(US$ 32.7billion^(a)) in the fiscal year ended
March 31, 2007. For more information visit http://global.mitsubishielectric.com

^(a) At an exchange rate of 118 yen to the US
dollar, the rate given by the Tokyo Foreign Exchange Market on March 31,
2007